DOMBROVSKIS PUTS CLEARLY: REFORMS THEN MONEY FIRST. All illusions about aid from the Next Generation Fund fall

Do you think that the "Next Generation Fund" is something that comes without constraints, just like helping countries in difficulty? Well, completely wrong. The Next Generation Fund, or recovery fund as it was known until yesterday, will be super conditional, in the sense that the money given can be spent ONLY in investments and ONLY for what the Union wants. If you think, for example, of building a highway or a bridge, forget it.

Who says that? The Vice President of the European Commission, Valdis Dombrovskis, We take his exact words from a speech made yesterday to present the project:

The fund meets two complementary objectives:

Firstly, to promote the economic, social and territorial cohesion of the EU by improving the ability of national economies to thrive and also face possible future shocks.

Secondly, to support the greening and digitization of our economies. To give an example: we are committed to investing in tomorrow's technologies, be it green technology or digital and data infrastructures. This will allow us to remain competitive globally.

As mentioned above, this crisis will create a huge investment gap. This results from lower demand levels, supply side disruptions and worsening financial conditions.

Businesses and governments will also need to invest to adapt to the "new normal" and to address the vulnerabilities exposed by the virus.

Let's make a hypothesis: tomorrow, in Japan, cold fusion, or even hot fusion, is made, which makes the energy problem secondary in a few years, to which investments in "Green" energy will serve. If tomorrow digital protocols always change profoundly, going beyond 5G, what good will it be to have concentrated all investments only on digital? The evolution of knowledge and technology often takes unpredictable directions and makes colossal investments useless: at the beginning of the nineteenth century the "Canal Mania" broke out in the USA and in the United Kingdom: private and public invested huge amounts in the construction of waterways, seen at the time as the future of transport. Much of this construction was not used for more than thirty years for the development of the railway, and the result was an impressive destruction of value and investment. Betting everything on a sector is like putting all the money on a single number at the casino.

Then everything is subjected to the implementation of "Reforms", all to increase the "Competitiveness"

This means modernizing economies: making them more agile, more dynamic, more ecological and more digital. And improve productivity and the business environment.

Reforms should also address the serious social consequences of the crisis by investing in people's education and skills to improve research and innovation in order to promote employment and social inclusion.

So the idea of ​​the Commission is that you have to be more and more "Competitive" (towards whom ?, Who will be the next "Wagon" to leave behind? The next "Bone" to be removed from the kennel to make the "Dogs" tear and make them hungrier), more "Agile", therefore more "Jobs act", more "Green", more "Digital". Don't you hear how empty these words are? To a fifty year old without specific knowledge, do we get a degree in computer science? Empty words, which only hide a lust for power.

But it doesn't end here. Here is another excerpt:

In presenting its national plan, each country will have to explain how it contributes to achieving the priorities identified in the European Semester.

This will ensure that the expenses are well targeted and used. It also means that EU-level priorities translate into field outcomes in each country.

Countries will have to take full political ownership of their reforms, as has always been the case in the European Semester.

As you know, the European Semester is concerned with both tackling economic and social challenges. This will also be reflected in this new structure. National reform plans should address both dimensions, depending on the specific situation of each country.

This means modernizing economies: making them more agile, more dynamic, more ecological and more digital. And improve productivity and the business environment.

Reforms should also address the serious social consequences of the crisis by investing in people's education and skills to improve research and innovation in order to promote employment and social inclusion.

The Commission will also assess consistency with national energy and climate plans, the right transition plans and partnership agreements and operational programs adopted under Union funds.

So to be clear: The Commission, with the European semester, says how states should invest for funds. States present their plans which must be approved by the Commission. If they do well, they are CO-FINANCED by the Union. This means that own resources will also be made available to the Union: practically national investment policies will be decided at European level.

We combine the fact that in any case these resources will have to be paid by the "European Taxes", that is, by taxes, all to be decided, on the web, on energy, on plastic, on whatever is decided by the EU, and therefore you can evaluate whether they really " Funds ”are a help or not.

The pros are:

  • you can invest a little more money;

The cons:

  • there will be in almost two years;
  • will be paid by more taxes, therefore no tax relief;
  • investments made with this money will be decided by European objectives;
  • our internal investments will also be decided by European objectives.

Draw your conclusions.


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The article DOMBROVSKIS PUTS CLEARLY: FIRST REFORMS THEN THE MONEY. All illusions about the aid of the Next Generation Fund fall from ScenariEconomici.it .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/dombrovskis-mette-bene-in-chiaro-prima-riforme-poi-i-soldi-cadono-tutte-le-illusioni-sugli-aiuti-del-next-generation-fund/ on Sat, 30 May 2020 07:59:11 +0000.